Governor signs Unity Bill regulating medical marijuana in Oklahoma

HB 2612, the so-called “Unity Bill” which was approved overwhelmingly by the Oklahoma Legislature earlier this week, was signed into law by Governor Stitt yesterday afternoon. The product of the bi-cameral Medical Marijuana Working Group, it is intended to augment State Question 788, which legalized medical marijuana last year. The new law, which is called the Oklahoma Medical Marijuana and Patient Protection Act (the Act), is expected to go into effect 90 days after the closure of this legislative session — likely mid to late summer.

The following outline summarizes certain changes implemented by the Act that will affect commercial licensees. Marijuana remains illegal under federal law, and there remain legal risks for those engaged in the business even though they may be operating in compliance with Oklahoma law.

Oklahoma Residents — The Act does not alter the requirement that all members, managers, board members, and holders of 75% of ownership interests must be Oklahoma residents. However, it defines Oklahoma residents as those who can establish proof of Oklahoma residency for at least two years immediately preceding the date of application or five years of continuous Oklahoma residency during the preceding 25 years. Proof may include a driver’s license, voter identification card, utility bill (excluding cell phone or Internet bill), residential property deed or lease. It is not clear whether licenses that have already been issued to Oklahoma residents who cannot satisfy the new residency standards by the time of renewal will be renewed.

Moreover, the definition of “owner” has been expanded to include all officers of a corporate entity, and “any other person holding an interest or convertible note in any entity which owns, operates or manages a licensed facility.” This expands and potentially complicates the calculation of satisfaction of the 75% residency requirement. The Act prohibits publicly traded companies from being owners.

Testing — A medical marijuana testing laboratory license is created. Direct or indirect owners of commercial licenses for dispensaries, growers, or processors may not be owners of a laboratory. A medical laboratory director must be on site during operational hours. Laboratories may accept samples of medical marijuana only from commercial licensees or licensed patients or caregivers and may send samples to other licensed laboratories for reference testing. Laboratories must develop policies to prevent the existence or appearance of conflicts of interest.

Each of the following categories must be tested: microbials, mycotoxins, residual solvents, pesticides, THC and other cannabinoid potency, terpenoid potency, and heavy metals. No later than January 1, 2020, laboratories must be accredited. Commercial growers may not transfer or sell medical marijuana, and processors may not transfer, sell, or process medical marijuana unless samples from each harvest batch or production batch have been tested for contaminants and passed.

Physicians — Physicians will no longer be required to be board certified in order to write recommendations for patients; it will be sufficient if they are licensed in Oklahoma and in good standing with the appropriate medical board. A physician who recommends use of medical marijuana may not be located at the same physical address as a dispensary. Physicians may notify the Oklahoma Medical Marijuana Authority (“OMMA”) that a patient no longer meets the requirements for a patient license, and the OMMA will revoke the patient’s license.

Patients — Patients and their caregivers may only grow medical marijuana on real property that is owned by the patient license holder or on real property for which the patient license holder has the owner’s written permission to grow marijuana on the property. Plants must be grown so that they are not accessible to the general public and not visible from any adjacent street. Extraction equipment and processes using butane, propane, carbon dioxide, or any potentially hazardous material are prohibited in residential properties.

Owners of residential or commercial property and business owners may prohibit the smoking or vaping of cannabis within the premises or within 10 feet from the entry. However, patients may not be denied the right to consume other cannabis products as permitted by law. Further protections for patients in the Act include non-discrimination in connection with public benefits, firearms, and employment.

Packaging and Labeling — Packaging must not be designed to appeal to people under 21 years old and must be in child resistant containers at the point of sale to the patient or caregiver. Packaging cannot include false or misleading statements or be intentionally confusing. OMMA will develop standard labeling requirements.

Seed-to-Sale Tracking System — All medical marijuana and medical marijuana products must be purchased solely from Oklahoma-licensed businesses and may not be purchased out-of-state. The Act makes clear that growers may sell seeds, flower, or clones to other commercial growers as well as dispensaries and processors. The OMMA will require commercial licensees to maintain seed-to-sale inventory tracking systems and to account for every transaction with another commercial licensee, patient, or caregiver.

Processing License Applications — OMMA will have 90 days to process commercial applications, as opposed to 14 days under the current statute. If an applicant has not yet obtained the necessary permits, certificates, or licenses from a municipality but has otherwise fulfilled all obligations under the new statute, the OMMA will grant a conditional license that is valid for a period of one year or until the applicant obtains the necessary local permits, certificates, or licenses. The conditional license does not permit the transfer of any medical marijuana until approved by OMMA.

OMMA is authorized to develop policies and procedures for disclosure by a medical marijuana business of financial interest and ownership.

Transportation — Medical marijuana transporter licenses will continue to be issued automatically with other commercial licenses, but it will be possible to obtain a transporter license independently. A transporter may contract with multiple licensed businesses and may maintain a licensed premises for temporary storage and centralized distribution. The premises must meet all applicable security requirements. Individuals must be issued transporter agent licenses to be qualified to transport medical marijuana or product for a licensed commercial transporter. The fee for the agent license is $100. Product must be transported in accordance with specific requirements for security, vehicles, and manifests.

Miscellaneous — The statute authorizes medical marijuana research facilities and a medical marijuana education facility, which must be a charitable organization. OMMA is expected to propose new rules to implement the Act.

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